STOCK MARKET NEWS: US markets lower, BOA economist sees 'mild' recession, gas, oil, crypto down

Symbol Price Change %Change
I:DJI $33,761.05 424.38 1.27
SP500 $4,280.15 72.88 1.73
I:COMP $13,047.19 267.27 2.09

U.S. stocks were lower early Monday morning after The People’s Bank of China cut its rate on a one-year loan to 2.75% from 2.85% and injected an extra 400 billion yuan ($60 billion) in lending markets after government data showed July factory output and retail sales weakened. 

Stocks in the U.S. rose Friday with major indexes notching gains for the week as investors cheered signs of a slowdown in inflation. 

The S&P 500 and the Nasdaq Composite both posted their fourth consecutive week of gains. That marked their longest stretch since a streak that ended in early November, when both rose for five weeks in a row. 

Investors hope a recent deceleration in consumer-price growth will encourage the Federal Reserve to raise interest rates at a slower pace, which in turn could prevent the economy from tipping into a recession.

Lower rates tend to boost prices for stocks, bonds and more speculative assets like cryptocurrencies, and stocks have swooned this year in part because of the Fed’s aggressive rate increases. 

Though inflation is still near the highest it has been in decades, data Wednesday showed that it had eased, clocking in at 8.5% in July compared with 9.1% in June. 

Data on Thursday showed that U.S. suppliers raised prices in July at the slowest annual pace since last fall, buoyed by a drop in energy prices. 

On Friday, the S&P 500 climbed 72.88 points, or 1.7%, to 4280.15. The Nasdaq Composite jumped 267.27 points, or 2.1%, to 13047.19. The Dow Jones Industrial Average rose 424.38 points, or 1.3%, to 33761.05. The Dow rose 2.9% for the week. The Nasdaq and the S&P 500 were up more than 3% for the week. 

Investors will pay extra attention to second-quarter earnings reports from retailers Walmart, Target, Lowe’s, TJ Maxx and Ross stores and also to the health of the U.S. consumer, providing some clarity on the impact of inflation on corporate profits.

The markets will also be focusing on management guidance for confirmation of recent data showing inflation has peaked.

In addition, The New York Federal Reserve will kick off this week’s economic reports at 8:30 a.m. ET Monday with a closely watched gauge of regional manufacturing activity.

The Empire State Manufacturing Survey is expected to decline to 5.5 in August, from a stronger-than-expected reading of 11.12 the previous month when it exited contraction territory (a number above zero means that more New York-area manufacturers say business conditions are improving rather than worsening.) 

Also reporting will be several housing-related reports due out this week.

At 10 a.m. ET, the National Association of Homebuilders will release its Housing Market Index for August. The homebuilder sentiment gauge is anticipated to hold steady at 55, the lowest since May 2020, after tumbling much more than expected to that level last month after high inflation and mortgage rates hurt home sales and buyer traffic. It would signal that barely more than half of NAHB members regard business conditions as good.

Other reports to watch this week are housing starts and building permits on Tuesday, and existing home sales on Thursday, both for the month of July. 

Meanwhile, shares were mixed in Asia after China cut a key interest rate and Japan reported its economy expanded at a faster pace in the last quarter. 

Tokyo and Sydney advanced while Hong Kong and Shanghai fell. 

Tokyo’s Nikkei 225 index added 1.1% to 28,871.78 and the S&P/ASX 200 in Sydney climbed 0.4% to 7,062.50. T

he Shanghai Composite index edged 0.1% lower to 3,275.34, while Hong Kong’s Hang Seng index gave up 0.4% to 20,092.37. 

South Korean markets were closed for a holiday. 

Bangkok’s SET index rose 0.4% after the Thai government reported the economy expanded at a 0.7% quarterly pace in April-June, slowing from 1.1% growth in the first quarter of the year.

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